Sunday, April 17, 2016

Confusion Confounded

After a long time I felt strongly enough about a branding issue to actually write about it. I'm going to take two examples of iconic brands who seem to have got it all wrong - Taj Hotels and Jet Airways.

Let's take Jet Airways first. After its launch the airline was well positioned as a high quality, full service airline. Those of us who were not tempted by the short red skirts and general razzmatazz of Kingfisher were quite happy to fly Jet. On their international routes their service was truly world class. They also had a brilliant frequent flyer programme and all in all the airline looked like a world beater. Problems started after the launch of low cost airlines especially Indigo. All of a sudden Jet no longer looked so attractive. The 'always on time' proposition of Indigo coupled with 'no frills' flying was an instant hit with consumers and Jet began to look tired.

Their responses were bizarre to say the least. Having lent a helping hand to Sahara by buying them out when they were leaking cash copiously, Jet proceeded to rebrand the airline as 'Jet Lite' clearly implying that the airline was part of their B team. Then even more bizarrely, they launched the Teutonic sounding Jet Konnect with the Kon being pronounced as Con rather than Cun. Konnect was another B team for Jet where you had to pay for food and so on.

Consumers were understandably confused or should I say Konfused? Booking was not centralized and you never knew when you would fly Lite or remain Konnected. Coupled with the rise of Indigo, Jet rapidly lost market share and resorted to a number of anti personnel actions that further eroded its Brand Image.

In India, budget airlines do not have a markedly different cost structure than full service airlines. Apart from fuel and personnel the only difference may be in airport charges in places like Delhi who have a separate terminal for budget airlines. In addition, food costs are another factor but they really don't add up to much. In effect, there is no reason why efficiently managed full service airlines should be at a significant coat disadvantage to budget airlines in India. I think Jet Airways has finally realized this. The drop in fuel prices has also helped as margins are more attractive now.

Fortunately, Jet has gone back to its roots. A full service, efficiently managed, modern airline that may be marginally more expensive than Indigo but one that provides in flight meals and has an attractive frequent flyer programme is a good option. Excellent international sector services and the link with Etihad is also helping. Business class is another plus especially on long haul flights. Consistent brand experience helps tremendously in growing brand equity and consequently market share.

It appears, therefore that Jet has found it's way back from the morass it was getting into. Let's now look at another iconic brand that hasn't managed to do so yet and I wonder if they even realize that they are destroying value with their branding strategy. I am referring to Taj Hotels though the lessons may be equally applicable to a lot of other hotel chains.

The Taj Group of Hotels derives its  equity from it's corporate parent, the Tata Group as well as its flagship property in Mumbai. There is a sense of old world charm, class and sophistication. Nothing noveau riche about the Taj! There is also an image of cosmopolitan Indianness. A person who may be a global traveler but is comfortable with his Indian roots. With India poised to take off in the global economy this would appear to be a wonderful place to be in.

Regrettably in their attempt to create sub brands such as Vivanta and Gateway, the Taj group runs the risk of diluting this core equity. Let me give you two examples:

  1. The Taj property in Bentota, Sri Lanka dominates the most popular beach in Sri Lanka. The hotel has magnificent views and is laid out in a vast expanse of green area. It was clearly positioned to represent the Taj image in Sri Lanka as a gracious, Indian, cosmopolitan hotelier. Unfortunately the Taj Group has now branded the property as Vivanta. When I visited after a few years I was surprised to discover that local Tuk Tuks and the shops around have completely forgotten about the Taj and instead come up with a faceless Vivanta that does not mean anything.
  2. The most upscale Taj restaurant in Bangalore is the Karavalli, a coastal food restaurant rated at #3 on Trip Advisor is located, astonishingly, in the Gateway Hotel that is the lowest segment of Taj Hotels in Bangalore. It is not in the West End or the Residency (referred to as Vivanta in the new avatar) Gateway is not even referred to as a Taj Hotel!
There are many examples of this sort of anomaly. The Taj Group of hotels has a magnificent heritage both from their parent group as well as from the development of the chain over a 100 years. What is the point in frittering it way across meaningless hotel brands that nobody identifies with?

Creating a powerful, emotive and meaningful brand like Taj hotels is very difficult and praiseworthy. It is far better to carry the Taj branding right up front rather than let it wither away. Everyone recognizes that hotels in different locations, catering to different customers etc will have different amenities different pricing and even a different ambiance. Not calling them Taj is to orphan them in a way which the group should not do in my opinion.

So there it is, one brand that has clawed its way out of the morass that it was getting into and another that does not seem to realize that its destroying value. Hope that changes soon!

17 comments:

  1. Interesting! In 2013 I flew from Udaipur to Delhi in Jet. Was quite impressed. Actually they bumped us to First class.

    ReplyDelete
    Replies
    1. By 2013 Jet was beginning to get its mojo back. Good that you liked the experience. It's improved further in the last couple of years.

      Delete
  2. Debu... the main goal of the two re brandings could be to improve the image of the main brand and make it exclusive and creating the secondary brand to cope with the low cost market. But as you said the signature properties which can be linked to your main brand should not be diluted to the lower end.... Kishore

    ReplyDelete
    Replies
    1. Kishore the point I am making is that powerful brands are more elastic than many marketers think. What I mean is that the Taj Group of Hotels can easily have lower end properties with fewer amenities as well. They just need to be priced appropriately. The charm and charisma of the Taj brand will ensure that they command a premium in that price segment. This will NOT dilute brand equity - in fact it will add to the visibility and recognition of the brand.

      As an example take BMW. The brand has benefited tremendously by the introduction of the X1 at a relatively low price. It has enabled many more people to experience the BMW brand - eventually the same folk will graduate upwards.

      Delete
  3. insightful analysis. i do agree with aviation case studies. however in the case of Taj i believe it is a well founded intent that has been improperly executed. i am not sure a brand as iconic and monolithic as Taj is capable of extending itself into the "budget vacation" and "holiday spaces" without compromising on its DNA and hence the need for a separate identity / sub-brand. while there is no brand recall for the erstwhile Taj at Bentota, it would be interesting to evaluate whether the new entity is performing better than the old one in terms of occupancy and turnover? my submission is that with a brand like Taj its really tricky - imagine a loyalist from (full service) Taj landing up at a (budget) Taj and only to realise that there is no specialty restaurant. or conversely a customer from (budget) Taj landing up at a (full service) Taj only to realise that he cannot afford breakfast. Between Gateway and Vivanta etc the team has really been struggling to carve out a niche for itself in these separate segments. perhaps the real question is whether they should at all bear the family name of Taj?

    ReplyDelete
    Replies
    1. I think if they don't bear the family name Taj we are really wasting the valuable imagery that the brand conjures up. Maybe sub brands are required as you have mentioned. I think the problem comes from having imagery associated with the sub brands that may be different from the parent. If you see Chitra's example below of the Taj Ambassador it's a case in point. Perhaps what one needs is sub brands that are based on pricing and amenities alone. That way they will not try to create a 'sub image' that may be different from the parent.

      Delete
  4. Yes, agree that Jet Lite was a neither here nor there experiment - especially as some of the flights were full service while others not. And it's good they abandoned it. Re Taj, the intent behind the creation of the differentiated brands was good, but the execution has been flawed. Delhi's Ambassador hotel which Taj acquired has been turned into a Vivanta brand. By no stretch of imagination is this old world property a good fit with the "bon vivant" youthful imagery that a Vivanta conjures.
    I suspect Taj in a hurry to reach the 100 hotel mark signed up a lot of properties that were not a good fit with the brand values they had assigned to Gateway/ Vivanta and have been unable to get the owners to meet the brand standards.

    ReplyDelete
    Replies
    1. It's quite possible that the Taj group was in a big hurry. Many of the international hotel chains who have grown by acquisition also suffer from the same issue of having unrelated brands in their portfolio. My point is that that the name 'Taj' has a whole lot of very valuable imagery associated with it. Why not use that along with the sub brands? Secondly, the sub brands also try to create an image segmentation (your point about Vivanta above). This creates a problem as all the properties may not fit into that image profile. Perhaps the sub brands should only be based on pricing/amenities that they have on offer.

      Delete
  5. Vijay Parthasarathy 11:07 AM Keep this message at the top of you Also sometimes multiple brands are created, which don’t look too different and are also not priced too different but only by the Marketing strategy of the distributor involved are they differentiated.

    Case in point: Nissan’s Terrano and Renault’s Duster come from the same factory. Look almost identical, priced almost same..Duster outsells Nissan tenfold if not more than that!!

    Lam you are quite right about real differences. That's the problem with the Taj example. It's quite muddled.

    Another point. Many people have brought up examples of companies that have multiple brands at different price and value points. That's perfectly fine. For example in India levers has soaps and detergents at several price points.

    The issue comes when the parent brand tries to have multiple identities. That's the tough one.

    Actually, we have excellent examples of brands moving both up/down quite successfully in the US:Honda and Toyota with their Acura and Lexus brands respectively. Today Lexus gives Mercedes and BMW a serious run for the money. Marriott with their Courtyard brand – both are extremely successful, there is no confusion in the brand promise – people know exactly what they are getting, and use a common reservation system and guest/points program. For these strategies to work, I think you need real differentiation, and a more knowledgeable customer base which can look beyond just the branding to the actual price/value equation. I think your examples of the airlines shows confusion in both aspects. On the Taj Vivanta example, I am less convinced.
    Lam
    From: Micky Gmail
    Johnny Walker Blue Label comes to mind Bhattu boss. Feeling thirsty constantly these days...

    ReplyDelete
  6. Possibly a good example of a brand going upscale is Maruti moving their premium segment to an altogether different name Nexa. It enables a better consumer experience when he goes to Nexa than when he used to go to Maruti showrooms.

    Nips - how has Face Book or What App become more premium/upscale?

    Facebook + WhatsApp?
    Nikhil
    Bhattu, car industry seems to get it right often enough
    Micky,
    Integrating acquisitions is a tricky issue. An example of what can go wrong is the Jet Airways acquisition of Sahara and subsequent rebranding as Jet Lite that I have touched upon. There are many such examples. I think you are right about international Hotel Chains - they have grown by acquisition and many of the sub brands appear quite random
    Making brands more premium or upscale is a major problem and there do not seem to be many successful examples that I know of. Would be great to hear about your experience.
    Marketing Kitab is a strict no no for me. Working on a novel.
    Debu
    Brilliantly written Debu. Bhandu you make a great point about sub brands in international chains but I think most of those may have been acquisitions.
    One example of going upscale successfully is Westin with the 'W' concept but I'm not sure if it's a huge success. Anyway going up is always better for a brand than going down with a discount version.

    ReplyDelete
  7. I think many airlines in India should take a leaf out of Southwest Airlines of the US and emulate them.

    With regard to Gateway Hotel in Bangalore, the oft repeated reaction by most laymen is: "What? Gateway is part of the Taj Group? I didn't know that!"

    ReplyDelete
  8. Dear Debu
    Brilliant article.Some times a strength like meal in Jet becomes a liability when trying to control cost , you serve lousy tasteless Meal. If I was running Jet , I will make food really Yummy as differentiator as in airlines ticket pricing few hundred makes no difference!!!!!

    Regarding Taj your comments are so accurate and thought provoking. I visit Nasik quite often and Taj hotel was the most preferred choice now it is converted to Gateway and it has become just another hotel competing with Express Inn etc.

    Staying in particular brand if hotel has a status value also , just like cars , hence diluting it makes it less attractive. Pravesh Srivastava

    ReplyDelete
    Replies
    1. Absolutely! Jet needs to retain their edge in service quality, food etc otherwise they run the risk of going below Indigo in brand image. I had exactly the same feeling while staying at the Blue Diamond in Pune. Now ranked No 12 from it's no one position in the past. Faceless Vivanta, no mention of Taj. I'm so glad they have seen the writing on the wall and have changed their strategy.

      Delete